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Tue 31 Oct 2006 04:00 PM

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Handset vendors turn to emerging MEA markets to drive future growth

The emerging markets of the Middle East and Africa represent the last great frontier for mobile handset vendors in their bid to expand market share worldwide.

With the territories of Western Europe and North America approaching saturation point in terms of handset sales, these markets represent a potential goldmine for the industry’s top vendors.

Recent research from Strategy Analytics predicted that 48 million ultra low cost handsets would be shipped worldwide in 2007, making the category the fastest growing in the mobile handset business.

Furthermore, research published by global industry body GSM Association, suggested that 80% of the next one billion cellular service subscribers would come from emerging markets in regions such as the Middle East and Africa.

The key to unlocking this potential lies in the development of low-cost handsets.

The world’s top two mobile phone vendors, Nokia and Motorola, which are best known for developing technologically advanced handsets, are pursuing aggressive development strategies in this regard. Motorola currently dominates the market for low-cost handsets, with an 80% share, however Nokia, which has been slower to roll-out its entry level portfolio, is focusing its efforts in the sector and quickly gaining ground as a result.

Leveraging strong brand-equity, both companies continue to develop new handsets and refurbish superseded models, with many of these customised to suit the environmental and social demands of developing markets.

Many of these handsets include useful features such as a built-in torch, dust and water resistance, speech-to-text functionality and multiple language menus.

In the Middle East, Islamic applications included as standard on many of these handsets have proven hugely popular with consumers.

With increased involvement from the major players spurring intense competition in the sector, Strategy Analytics found that the vast bulk of new handsets under development will boast specific features that only a couple of years ago wouldn’t have looked out of place on high-end models, including VGA cameras, colour screens and FM radio receivers.

Furthermore, the recent tender released by the GSM Association for the design of a low-cost 3G handset represents a remarkable development for the sector.

With mobile chip prices continuing to tumble, new 3G innovations will revolutionise the market and the development of low-cost, high-tech handsets, spelling good news for distributors, retailers and consumers alike.

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